2021 Water Wastewater Rate Study

Water and Wastewater Rate Study Township of Leeds and the Thousand Islands ________________________

January 20, 2021

Watson & Associates Economists Ltd. 905-272-3600 info@watsonecon.ca

Table of Contents Page 1.

Introduction...................................................................................................... 1-1 1.1 Background............................................................................................. 1-1 1.2 Study Process......................................................................................... 1-3 1.3 Legislative Context ................................................................................. 1-3 1.3.1 Sustainable Water and Sewage Systems Act ............................ 1-4 1.3.2 Safe Drinking Water Act ............................................................. 1-4 1.3.3 Financial Plans Regulation......................................................... 1-5 1.3.4 Water Opportunities Act ............................................................. 1-7 1.4 Water and Wastewater Rate Calculation Methodology ........................... 1-9 1.4.1 Customer Demands and Consumption Forecast ....................... 1-9 1.4.2 Capital Needs Forecast ........................................................... 1-10 1.4.3 Capital Funding Plan ................................................................ 1-10 1.4.4 Operating Budget Forecast ...................................................... 1-10 1.4.5 Rate Forecast and Structure .................................................... 1-11

2.

Forecast Growth and Service Demands ........................................................ 2-1 2.1 Current Service Demands....................................................................... 2-1 2.2 Forecast Service Demands..................................................................... 2-1

3.

Capital Infrastructure Needs........................................................................... 3-1 3.1 Overview of Lifecycle Costing ................................................................. 3-1 3.1.1 Definition .................................................................................... 3-1 3.1.2 Financing Costs ......................................................................... 3-2 3.1.3 Costing Methods ........................................................................ 3-4 3.1.4 Asset Inventory .......................................................................... 3-6 3.2 Capital Needs Forecast .......................................................................... 3-7

4.

Capital Cost Financing Options ..................................................................... 4-1 4.1 Development Charges Act, 1997 ............................................................ 4-2 4.2 Municipal Act .......................................................................................... 4-2 4.3 Grant Funding Availability ....................................................................... 4-3

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Table of Contents (Cont’d) Page 4.4 4.5 4.6

Existing Reserves/Reserve Funds .......................................................... 4-3 Debenture Financing............................................................................... 4-3 Recommended Approach ....................................................................... 4-4

5.

Net Operating Expenditure Forecast ............................................................. 5-1 5.1 Operating Expenditures .......................................................................... 5-2 5.2 Operating Revenues ............................................................................... 5-3

6.

Forecast Water and Wastewater Rates .......................................................... 6-1 6.1 Water Rates ............................................................................................ 6-1 6.2 Wastewater Rates .................................................................................. 6-5 6.3 Forecast Water and Wastewater Rate Impacts ...................................... 6-9 6.4 Summary .............................................................................................. 6-16 6.5 Recommendations ................................................................................ 6-16

Appendix A Water Services .................................................................................... A-1 Appendix B Wastewater Services .......................................................................... B-1

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List of Acronyms and Abbreviations Acronym

Full Description of Acronym

C.P.I. D.C. G.I.S. OCWA O. Reg. P.I.L. Q.S.R. S.D.W.A.

Consumer Price Index Development Charges Geographic Information System Ontario Clean Water Agency Ontario Regulation Payment-in-Lieu Quick Score Rating Safe Drinking Water Act

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Report

Chapter 1 Introduction

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1. Introduction The Township of Leeds and the Thousand Islands (Township) retained Watson & Associates Economists Ltd. (Watson) to undertake a water and wastewater rate study.

As required by provincial regulation (O. Reg 453/07), the Township maintains a Water Financial Plan as a condition of its drinking water license. With the drinking water license coming up for renewal, the Township’s current Water Financial Plan, completed in 2015, needs to be updated. This rate study has been prepared to assess the financial sustainability of the Township’s water and wastewater services through an analysis of the Township’s rate structure and user rates. Once approved by Council, this rate study will form the basis for the financial plan required under O. Reg. 453/07.

1.1 Background The Township has a present population of approximately 9,465 people, based on the 2016 Census. There are approximately 304 water and wastewater customers using the municipal systems. The treatment, storage, and distribution/collection of water and wastewater are the responsibility of the Township.

All customers are currently billed a monthly base charge that varies with meter size.

The monthly base charge includes 20 m3 of consumption and any consumption in excess of this threshold is charged at a consumptive rate based on the meter size. The water and wastewater rates currently in effect are summarized below in Table 1-1.

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Table 1-1 Township of Leeds and the Thousand Islands 2020 Water and Wastewater Rates

2020 - Water Billing Rates

2020 - Wastewater Billing Rates

Monthly Base Charge

Monthly Base Charge

3

(includes up to 20 m ) 1 ½" or less 2" or more

3

75.05 91.13

(includes up to 20 m ) 1 ½" or less 2" or more

Volume Charge - per m3

Volume Charge - per m3

(usage over 20 m3)

(usage over 20 m3)

1 ½" or less 2" or more

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2.98 3.94

1 ½" or less 2" or more

70.86 86.04

2.98 4.00

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1.2 Study Process The objectives of the water and wastewater rate study and the steps involved in carrying out this assignment are summarized below: •

Update water and wastewater service demand assumptions based on analysis of historical consumption and recent trends;

•

Estimate future consumption levels by applying demand assumptions to forecast growth based on historical residential building permit activity;

•

Identify all current and future water and wastewater system capital needs to assess the immediate and longer-term implications;

•

Build a capital program that addresses specific needs identified by Township staff;

•

Identify potential methods of cost recovery with respect to the capital needs listing. These recovery methods may include other statutory authorities (e.g.

Development Charges Act, 1997, Municipal Act, etc.) as an offset to recovery through the water and wastewater rates;

• •

Forecast annual operating costs and rate-based funding requirements; Develop a long-term water and wastewater rate forecast;

•

Provide an impact assessment on the rate payers; and

•

Present findings to staff and Council for their consideration.

In approaching this study, the following analysis in provided: Chapter 2 – Chapter 3 – Chapter 4 – Chapter 5 – Chapter 6 –

Forecast Growth and Service Demands Capital Infrastructure Needs Capital Cost Financing Options Operating Expenditure Forecast Forecast Water and Wastewater Rates

1.3 Legislative Context Resulting from the water crisis in Walkerton, significant regulatory changes have been made in Ontario. These changes arose in consequence to the Walkerton Commission

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and the 93 recommendations made by the Walkerton Inquiry Part II report. Areas of recommendation included: •

watershed management and source protection;

• •

quality management; preventative maintenance;

• •

research and development; new performance standards;

•

sustainable asset management; and

•

lifecycle costing.

The following sections describe significant applicable regulatory areas.

1.3.1 Sustainable Water and Sewage Systems Act The Sustainable Water and Sewage Systems Act was passed on December 13, 2002.

The intent of the Act was to introduce the requirement for municipalities to undertake an assessment of the “full cost” of providing their water and wastewater services. In total, there were 40 areas within the Act to which the Minister may make regulations; however regulations were never issued. On December 31, 2012, the Sustainable Water and Sewage Systems Act was repealed.

1.3.2 Safe Drinking Water Act The Safe Drinking Water Act was passed in December 2002. The Safe Drinking Water Act provides for 50 of the 93 Walkerton Part II recommendations. It focuses on the administrative and operational aspects of the provision of water.

The purposes of the Safe Drinking Water Act are to “recognize that the people of Ontario are entitled to expect their drinking water to be safe and to provide for the protection of human health and the prevention of drinking water health hazards through the control and regulation of drinking water systems and drinking water testing. 2002, c. 32, s. 1.”

The following is a brief summary of the key elements included in the Safe Drinking Water Act: •

Mandatory licensing and accreditation of testing laboratories;

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• •

New standards for treatment, distribution quality and testing; Mandatory operator training and certification;

• •

Mandatory licensing of municipal water providers; Stronger enforcement and compliance provisions; and

•

“Standard of care” requirements for municipalities.

This legislation impacts the costs of operating a water system with the need for higher skilled operators including increased training costs, increased reporting protocols and requirements, continuing enhancements to quality standards, and the costs to license each water system.

1.3.3 Financial Plans Regulation On August 16, 2007, the Ministry of Environment introduced Ontario Regulation (O. Reg.) 453/07 which requires the preparation of financial plans for water systems (and municipalities are encouraged to prepare plans for wastewater systems). The Ministry of Environment has also provided a Financial Plan Guideline to assist municipalities with preparing the plans. A brief summary of the key elements of the regulation is provided below: •

The financial plan will represent one of the key elements to obtain a Drinking Water Licence.

•

The plan is to be completed, approved by Council Resolution, and submitted to the Ministry of Municipal Affairs and Housing as part of the application for receiving approval of a water licence.

•

The financial plans shall be for a period of at least six years, but longer planning horizons are encouraged.

•

As the regulation is under the Safe Drinking Water Act, the preparation of the plan is mandatory for water services and encouraged for wastewater services.

•

The plan is considered a living document (i.e. it can be updated if there are significant changes to budgets) but an update will need to be undertaken at a minimum every five years.

•

The plans generally require the forecasting of capital, operating and reserve fund positions, and providing detailed capital inventories. In addition, Public Sector Accounting Board full accrual information on the system must be provided for each year of the forecast (i.e. total non-financial assets, tangible capital asset

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acquisitions, tangible capital asset construction, betterments, write-downs, disposals, total liabilities, net debt, etc.).

•

The financial plans must be made available to the public (at no charge) upon request and be available on the municipality’s web site. The availability of this information must also be advertised.

In general, the financial principles of this regulation follow the intent of the Sustainable Water and Sewage Systems Act, 2002 to move municipalities towards financial sustainability for water services. Many of the prescriptive requirements, however, have been removed (e.g. preparation of two separate documents for provincial approval, auditor opinions, engineer certifications, etc.).

A guideline (“Towards Financially Sustainable Drinking-Water and Wastewater Systems”) has been developed to assist municipalities in understanding the Province’s direction and provides a detailed discussion on possible approaches to sustainability.

The Province’s Principles of Financially Sustainable Water and Wastewater Services are provided below: Principle #1: Ongoing public engagement and transparency can build support for, and confidence in, financial plans and the system(s) to which they relate.

Principle #2: An integrated approach to planning among water, wastewater, and storm water systems is desirable given the inherent relationship among these services.

Principle #3: Revenues collected for the provision of water and wastewater services should ultimately be used to meet the needs of those services.

Principle #4: Lifecycle planning with mid-course corrections is preferable to planning over the short term, or not planning at all.

Principle #5: An asset management plan is a key input to the development of a financial plan.

Principle #6: A sustainable level of revenue allows for reliable service that meets or exceeds environmental protection standards, while providing sufficient resources for future rehabilitation and replacement needs.

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Principle #7: Ensuring users pay for the services they are provided leads to equitable outcomes and can improve conservation. In general, metering and the use of rates can help ensure users pay for services received.

Principle #8: Financial Plans are “living” documents that require continuous improvement. Comparing the accuracy of financial projections with actual results can lead to improved planning in the future.

Principle #9: Financial plans benefit from the close collaboration of various groups, including engineers, accountants, auditors, utility staff, and municipal council.

1.3.4 Water Opportunities Act The Water Opportunities Act received Royal Assent on November 29, 2010. The Act provides for the following elements: • • •

Foster innovative water, wastewater, and stormwater technologies, services, and practices in the private and public sectors; Prepare water conservation plans to achieve water conservation targets established by the regulations; and Prepare sustainability plans for municipal water services, municipal wastewater services, and municipal stormwater services.

With regard to the sustainability plans: •

The Act extends from the water financial plan and requires a more detailed review of the water financial plan, and requires a full plan for wastewater and stormwater services; and

•

Regulations (when issued) will provide performance targets for each service – these targets may vary based on the jurisdiction of the regulated entity or the class of entity.

The Financial Plan shall include: •

An asset management plan for the physical infrastructure;

• •

Financial Plan; For water, a water conservation plan;

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•

Assessment of risks that may interfere with the future delivery of the municipal service, including, if required by the regulations, the risks posed by climate change and a plan to deal with those risks; and

•

Strategies for maintaining and improving the municipal service, including strategies to ensure the municipal service can satisfy future demand, consider technologies, services, and practices that promote the efficient use of water and reduce negative impacts on Ontario’s water resources, and increase cooperation with other municipal service providers.

Performance indicators will be established by service that: •

May relate to the financing, operation, or maintenance of a municipal service or to any other matter in respect of which information may be required to be included in a plan; and

•

May be different for different municipal service providers or for municipal services in different areas of the Province.

Regulations will prescribe: •

Timing;

•

Contents of the plans;

• •

Portions of the plan that will require certification; Public consultation process; and

•

Limitations, updates, refinements, etc.

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1.4 Water and Wastewater Rate Calculation Methodology Figure 1-1 illustrates the general methodology used in determining the full cost recovery water and wastewater rate forecast.

Figure 1-1 Water and Wastewater Rate Calculation Methodology Drivers: Legislation Local Issues Health & Safety Issues Technical Innovations

Growth Forecast

Capital Works Requirements

Operating Contribution to Capital

Financing Options: Reserves/Reserve Funds Development Charges Municipal Act XII Debt Limit Grants

Capital Budget Forecast

Capital-Related Expenditures

Operating Budget Forecast User Count and Profile

Draws from Reserves/ Reserve Funds

Reserves/ Reserve Funds

Contributions to Reserves/ Reserve Funds

Consumption Forecast

Rates Forecast

The methodology employed generally consists of five major elements:

1.4.1 Customer Demands and Consumption Forecast As noted in section 1.1, the Township employs a rate structure consisting of a monthly base charge and a consumptive rate. The base charge is imposed based on water meter size with higher charges imposed on larger meters, generally reflective of higher capital infrastructure demands. The consumptive rate, which also increases with meter size, is imposed on all consumption in excess of 20 m3 a month.

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This first step in the analysis is important as it produces the current base revenue by source and assumptions for forecasting purposes. The base charge revenues are forecast with customer growth. The customer profile forecast is modelled based on average annual historical building permit activity witnessed in the Township over the past 5 years.

The water consumption forecast is prepared by applying average annual consumption estimates to future development. Consumption estimates are based on average consumption levels by customer type drawn from the Township’s 2019 billing records.

1.4.2 Capital Needs Forecast The capital needs forecast is developed to measure program/service level adjustments, lifecycle requirements, and growth-related needs. Analysis conducted by the Ontario Clean Water Agency (OCWA), the operator of the Township’s systems, identified capital projects that together form the majority of the capital forecast. Capital expenditures are forecast with inflationary adjustments based on capital cost indices.

1.4.3 Capital Funding Plan The capital funding plan considers the potential funding sources available to address the capital needs forecast. The sources of capital funding include rate-based support, reserves/reserve funds, and debt for program/service level improvements. The use of rate-based funding is measured against the revenue projections and affordability impacts. The reserve/reserve fund sources are measured against the sustainability of these funds, relative to lifecycle demands, revenue projections, and affordability impacts. Debt financing is considered for significant capital expenditures where funding is required beyond long-term lifecycle needs or to facilitate rate transition policies. Debt financing is measured against annual repayment limits to ensure a practical and sustainable funding mix.

1.4.4 Operating Budget Forecast The operating budget forecast considers adjustments to the Township’s base budget reflecting program/service level changes, operating fund impacts associated with infrastructure, and financing of capital needs. The operating expenditures are forecast with inflationary adjustments and growth in service demand, based on fixed and variable cost characteristics. The operating budget forecast ties the capital funding plan and

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reserve/reserve fund continuity forecast to the rate-based revenue projections. This ensures sufficient funding for both the ongoing annual operation and maintenance of water and wastewater services, as well as the capital cost requirements to ensure service sustainability. Operating revenues are projected to identify the base charge and consumptive rate components net of anticipated operating revenues, such as penalties, interest, and other miscellaneous revenues.

1.4.5 Rate Forecast and Structure The rate forecast and structure component of the analysis considers various rate structures to recover the forecast rate-based revenue from the projected customer demands. At this stage in the analysis, the full costs of service are measured against the customer growth and consumption demands to determine full cost recovery rates.

The analysis may consider alternative structures for base charge and consumptive components of the rates, consistent with municipal policies/strategies, industry practice, and customer affordability. Providing context to the rate forecast, the results are quantified to measure the impacts on a range of customer types and in relation to other municipalities.

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Chapter 2 Forecast Growth and Service Demands

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2. Forecast Growth and Service Demands 2.1 Current Service Demands In preparing the demands forecast for water and wastewater services, annual water and wastewater billing records for 2019 were analyzed. These records detailed the number of customers by type and meter size, and identified their metered water/wastewater consumption, enabling the development of a comprehensive profile of existing customers.

Based on analysis of this information, there are currently 304 water and wastewater customers in the Township. The majority of the customers on the Township’s water and wastewater systems have a meter size of 1 ½” or less.

A detailed review of billing records revealed some issues that will need to be further investigated by the Township. Based on 2019 monthly consumption records by account, approximately 36% of the accounts had zero consumption in 2019. This may be indicative of failing water meters that will require replacement however, as indicated above, the Township will need to further investigate this issue to determine the exact cause and appropriate corrective action. In the meantime, missing water consumption readings were supplemented by averages from the 2015-2017 period where available, or estimated based on average annual consumption of all other single-unit Township customers on a 1 ½” meter or less (i.e. 180 m3 annually).

It is noted that as the Township takes actions to correct these anomalies, the updated water consumption records should be compared to the estimates presented in section 2.2. If differences of more than 10% are found between actual water consumption and the estimates provided in section 2.2 below, then it would be advisable for the Township to undertake an update to this rate study.

2.2 Forecast Service Demands Over the next ten years (i.e. to 2030), the number of water and wastewater system customers is anticipated to increase by 14, resulting in total water and wastewater customers of 318 by 2030. It is expected that all new development will be connected to

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both water and wastewater services. Table 2-1 provides the detailed customer forecast for the period 2020 to 2030 for water and wastewater.

Billing records from 2019 were used to develop a forecast of water demands for the period 2020 to 2030. Average annual consumption levels, as detailed above, were calculated from 2019 billing records (i.e. 180 m3 annually) and applied to the Township’s growth projections to forecast future service demands. For wastewater, the flow estimates are based on each account’s water consumption.

As identified in Table 2-2, applying the per-customer consumption estimates to the customer forecast identified in Table 2-1 results in an estimated increase in total annual chargeable water consumption (i.e. consumption exceeding the 20 m3 monthly threshold) from 4,222 cubic metres as of 2019 to 4,587 cubic metres by 2030, or an annualized increase of 0.8%. It is noted that when developing the consumption forecast it was assumed that the Township would correct the aforementioned anomalies in customer consumption data over the next three years (i.e. 2021-2023). This is expected to result in larger recorded volumes of chargeable water consumption over the 2022-2024 period. Wastewater charges are collected based on the quantity of water consumed.

As will be discussed in Section 5, this study presents several scenarios for Council’s consideration. One of the variable factors between these scenarios is the amount of water consumption included in the base charge (currently 20 m3 per month). Table 2-3 presents the forecast of annual chargeable water consumption if the monthly threshold was reduced from 20 m3 to 15 m3. With this reduced threshold, the annual chargeable consumption would increase from 6,221 m3 to 7,395 m3, or an annualized increase of 1.7%.

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Table 2-1 Township of Leeds and the Thousand Islands Water/Wastewater Customer Forecast Water Customer Forecast Existing - 1 ½" or less Existing - 2" or greater New - Growth (1 ½" or less) Total

2020

2021

283 21 304

2022 283 21 1 305

2023 283 21 2 306

2024 283 21 4 308

2025 283 21 5 309

2026 283 21 7 311

2027 283 21 8 312

2028 283 21 10 314

2029 283 21 11 315

2030 283 21 13 317

283 21 14 318

Table 2-2 Township of Leeds and the Thousand Islands Chargeable Water Consumption Forecast (m³) Over 20 m3 Monthly Threshold Water Volume Forecast (m³)

2020

2021

2022

2023

Existing - 1 ½" or less 1,476 1,476 1,527 1,579 Existing - 2" or greater 2,746 2,746 2,746 2,746 New - Growth (1 ½" or less) 15 30 60 Total 4,222 4,237 4,303 4,385 3 Note: Consumption above only includes consumption exceeding 20 m per user per month.

2024 1,630 2,746 75 4,451

2025 1,630 2,746 105 4,481

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2026 1,630 2,746 120 4,496

2027 1,630 2,746 151 4,527

2028 1,630 2,746 166 4,542

2029 1,630 2,746 196 4,572

2030 1,630 2,746 211 4,587

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Table 2-3 Township of Leeds and the Thousand Islands Chargeable Water Consumption Forecast (m³) Over 15 m3 Monthly Threshold Water Volume Forecast (m³)

2020

2021

2022

2023

Existing - 1 ½" or less 3,338 3,338 3,569 3,800 Existing - 2" or greater 2,883 2,883 2,883 2,883 New - Growth (1 ½" or less) 34 69 137 Total 6,221 6,255 6,521 6,820 3 Note: Consumption above only includes consumption exceeding 15 m per user per month.

2024 4,032 2,883 172 7,086

2025 4,032 2,883 240 7,155

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2026 4,032 2,883 275 7,189

2027 4,032 2,883 343 7,258

2028 4,032 2,883 378 7,292

2029 4,032 2,883 446 7,361

2030 4,032 2,883 481 7,395

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Chapter 3 Capital Infrastructure Needs

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3. Capital Infrastructure Needs 3.1 Overview of Lifecycle Costing 3.1.1 Definition For many years, lifecycle costing has been used in the field of maintenance engineering and to evaluate the advantages of using alternative materials in construction or production design. The method has gained wider acceptance and use in the areas of industrial decision-making and the management of physical assets.

Lifecycle costs are all the costs which are incurred during the lifecycle of a physical asset, from the time its acquisition is first considered, to the time it is taken out of service for disposal or redeployment. The stages that the asset goes through in its lifecycle are specification, design, manufacture (or build), installation, commissioning, operation, maintenance, and disposal. Figure 3-1 depicts these stages in a schematic form.

Figure 3-1 Lifecycle Costing

Purchase Install Commission

Investment Costs

Operate Maintain Monitor

Operating Costs Throughout Life of Assets To End of Useful Life

Removal / Decommission

Disposal Costs Disposal

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3.1.2 Financing Costs This section will focus on financing mechanisms in place to fund the costs incurred throughout the asset's life.

In a municipal context, services are provided to benefit tax/rate payers. Acquisition of assets is normally timed in relation to direct needs within the community. At times, economies of scale or technical efficiencies will lead to oversizing an asset to accommodate future growth within the municipality. Over the past few decades, new financing techniques such as D.C.s have been employed, based on the underlying principle of having tax/rate payers who benefit directly from the service, pay for that service. Operating costs which reflect the cost of the service for that year are charged directly to all existing tax/rate payers who have received the benefit. Operating costs are normally charged through the tax base or user rates.

Capital expenditures are recouped through several methods, the most common being operating budget contributions, D.C., reserves, developer contributions and debentures.

New construction related to growth could produce D.C.s and developer contributions (e.g. works internal to a subdivision which are the responsibility of the developer to construct) to fund a significant portion of projects, where new assets are being acquired to allow growth within the municipality to continue. As well, debentures could be used to fund such works, with the debt charge carrying costs recouped from taxpayers in the future.

Capital construction to replace existing infrastructure, however, is largely not growthrelated and will therefore not yield D.C.s or developer contributions to assist in financing these works. Hence, a municipality will be dependent upon debentures, reserves, and contributions from the operating budget to fund these works.

Figure 3-2 depicts the costs of an asset from its initial conception through to replacement and then continues to follow the associated costs through to the next replacement.

As referred to earlier, growth-related financing methods such as D.C.s and developer contributions could be utilized to finance the growth-related component of the new asset. These revenues are collected (indirectly) from the new homeowner who benefits directly from the installation of this asset. Other financing methods may be used as well

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to finance the non-growth-related component of this project: reserves which have been collected from past tax/rate payers, operating budget contributions which are collected from existing tax/rate payers, and debenturing which will be carried by future tax/rate payers. Ongoing costs of monitoring, operating, and maintaining the asset will be charged annually to the existing tax/rate payer.

When the asset requires replacement, the sources of financing will be limited to reserves, debentures, and contributions from the operating budget. At this point, the question is raised: “If the cost of replacement is to be assessed against the tax/rate payer who benefits from the replacement of the asset, should the past tax/rate payer pay for this cost or should future rate payers assume this cost?” If the position is taken that the past user has used up the asset, hence he should pay for the cost of replacement, then a charge should be assessed annually through the life of the asset to have funds available to replace it when the time comes. If the position is taken that the future tax/rate payer should assume this cost, then debenturing and possibly a contribution from the operating budget should be used to fund this work.

Charging for the cost of using up an asset is the fundamental concept behind amortization methods utilized by the private sector. This concept allows for expending the asset as it is used up in the production process. The tracking of these costs forms part of the product's selling price and hence end users are charged for the asset's amortization. The same concept can be applied in a municipal setting to charge existing users for the asset's use and set those funds aside in a reserve to finance the cost of replacing the asset in the future.

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Figure 3-2 Financing Lifecycle Costs New Assets

Financing Methods

Replacement Assets

Purchase

Reserves/Reserve Funds Debentures User Fees Grants Other

Purchase

Install Commission

Install Commission

Operate

Operate

Maintain

Maintain

Monitor (Throughout Life of Assets)

Operating Budget

(To End of Useful Life)

Removal/Decommission

Disposal

Monitor (Throughout Life of Assets) (To End of Useful Life)

Proceeds on Disposal Funding of Disposal / Decommissioning Costs

Removal/Decommission

Disposal

3.1.3 Costing Methods There are two fundamental methods of calculating the cost of the usage of an asset and for the provision of the revenue required when the time comes to retire and replace it.

The first method is the Amortization Method. This method recognizes the reduction in the value of the asset through wear and tear, and aging. There are two commonly used forms of amortization: the straight-line method and the reducing balance method.

The straight-line method is calculated by taking the original cost of the asset, subtracting its estimated salvage value (estimated value of the asset at the time it is disposed of) and dividing this by the estimated number of years of useful life. The reducing balance method is calculated by utilizing a fixed percentage rate and this rate is applied annually to the undepreciated balance of the asset value.

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Figure 3-3 Straight-line Amortization Method

Straight-line Amortization Total Annual Contributions Equal Original Cost Original Cost

$x

$x

$x

$x

$x

$x

$x

$x

$x

$x

Original Cost – Salvage Cost Formula: Number of Years of Useful Life

The second method of lifecycle costing is the sinking fund method. This method first estimates the future value of the asset at the time of replacement. This is done by inflating the original cost of the asset at an assumed annual inflation rate. A calculation is then performed to determine annual contributions (equal or otherwise) which, when invested, will grow with interest to equal the future replacement cost.

Figure 3-4 Sinking Fund Method

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The preferred method used hereinafter is the sinking fund method of lifecycle costing.

3.1.4 Asset Inventory Water and wastewater capital asset inventory information was compiled from the Township’s asset management inventory, information provided by OCWA, and discussions with Township staff.

Lifecycle “sinking fund” contribution amounts for each piece of infrastructure have also been included. These calculations determine the level of capital investment to be included in the full cost assessment and rate forecast. Table 3-1 summarizes the estimated current asset replacement value and long-term average annual lifecycle replacement needs (2020 $). It is important to note that the Township’s current asset management information is lacking detailed replacement cost estimates, and therefore a combination of sources (e.g. benchmark replacement costs from other Ontario municipalities, high-level estimates from OCWA, etc.) have been utilized to estimate these figures. It is expected that the estimates of annual lifecycle costs will be further refined in the coming years through the Township’s ongoing asset management efforts.

If the annual lifecycle costs identified through subsequent asset management planning differ from the estimates shown in Table 3-1 by more than 10%, the Township should consider undertaking an update of this rate study.

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Table 3-1 Township of Leeds and the Thousand Islands Summary of Water and Wastewater Infrastructure (2020 $)

Asset

Annual Lifecycle

% of Replacement Cost

4,255,022 49,200 182,925 1,475,106 860,479 4,000,000 10,822,732

90,821 2,857 5,193 41,873 24,426 113,545 278,715

2.1% 5.8% 2.8% 2.8% 2.8% 2.8% 2.6%

6,000,000 2,663,800 15,000 15,000 250,000 8,943,800 19,766,532

128,066 75,616 426 871 27,066 232,045 510,760

2.1% 2.8% 2.8% 5.8% 10.8% 2.6% 2.6%

Replacement Cost (2020$)

Water Water Mains Water Meters Hydrants Well #1 Well #2 Water Tower Total Water Wastewater WW Mains SPS Treatment Lagoon - Pumps Lagoon - Sludge Removal Total Wastewater Total

3.2 Capital Needs Forecast Ten-year capital forecasts were provided by OCWA and further refined through discussions with Township staff to address known capital needs across the water and wastewater systems.

The total capital forecast—in current dollars—includes approximately $183,300 in capital needs, with $89,140 of that being related to water services and $94,140 to wastewater services. The capital forecast includes capital needs identified by OCWA to 2024 and a water meter replacement program (split 50/50 between water and wastewater). The water meter replacement program was included to reflect the lifecycle replacement needs of these assets and also to potentially address the concerns regarding consumption records discussed in Section 2.1.

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On this basis, the average annual value of the capital program for water is approximately $7,400. This level of expenditure is lower than the long-term water infrastructure needs identified in section 3.1.4, which suggests long-term capital needs of $278,700 (2020 $) annually. This suggests that the 10-year forecast of specific infrastructure renewal and replacement needs identified in this study are lower than longer-term capital funding requirements.

The average annual value of the capital program for wastewater is approximately $7,900. This level of expenditure is lower than the long-term infrastructure needs identified in section 3.1.4, which suggests long-term capital needs of 232,000 (2020 $) annually. This suggests that longer-term capital funding requirements are higher than the 10-year forecast of specific infrastructure renewal and replacement needs identified in this study.

The listing of water and wastewater capital need is presented in Tables 3-2 and 3-3, respectively. For rate determination purposes, the capital needs forecast has been indexed by 3.5% annually. This is generally reflective of the average annual capital cost inflation witnessed in the Statistics Canada Building Construction Price Index over the past 20 years.

As the Township further develops it asset management plan for the water and wastewater systems it is recommended that this study be updated to incorporate capital rehabilitation/replacements needs identified in the asset management plan.

Watson & Associates Economists Ltd.

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Table 3-2 Township of Leeds and the Thousand Islands Water Capital Budget Forecast (Uninflated $) Description Capital Expenditures Replace Flow Meters Replace Well Pump # 1 & Camera Inspection of Well Replace Well Pump # 2 & Camera Inspection of Well Water Meter Replacement Program Total Capital Expenditures

Total

Budget 2020

Forecast 2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

10,000

-

-

-

10,000

-

-

-

-

-

-

-

15,000

15,000

-

-

-

-

-

-

-

-

-

-

15,000

-

-

-

-

15,000

-

-

-

-

-

-

49,140 89,140

15,000

16,380 16,380

16,380 16,380

16,380 26,380

15,000

-

-

-

-

-

-

Table 3-3 Township of Leeds and the Thousand Islands Wastewater Capital Budget Forecast (Uninflated $) Description Capital Expenditures Build Shed at SPS Submersible Pump #1 Rebuild / Replace Submersible Pump #2 Rebuild / Replace Water Meter Replacement Program Total Capital Expenditures

Total

10,000 15,000 20,000 49,140 94,140

Budget 2020 15,000 15,000

Forecast 2021

2022

2023

10,000 16,380 26,380

20,000 16,380 36,380

16,380 16,380

2024

2025

2026

2027

2028

2029

2030

-

-

-

-

-

-

-

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Chapter 4 Capital Cost Financing Options

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4. Capital Cost Financing Options Historically, the powers that municipalities have had to raise alternative revenues to taxation to fund capital services have been restrictive. Over the past number of years, legislative reforms have been introduced. Some of these have expanded municipal powers (e.g. Bill 130 providing for natural person powers for fees and charges by-laws); while others appear to restrict them (Bill 98 in 1997 providing amendments to the Development Charges Act).

The most recent Municipal Act came into force on January 1, 2003, with significant amendments in 2006 through the Municipal Statute Law Amendment Act. Part XII of the Act and O. Reg. 584/06 govern a municipality’s ability to impose fees and charges.

This Act provides municipalities with broadly defined powers and provides the ability to impose fees for both operating and capital purposes. Under s. 484 of the Municipal Act, 2001, the Local Improvement Act was repealed with the in-force date of the Municipal Act (January 1, 2003). The municipal powers granted under the Local Improvement Act now fall under the jurisdiction of the Municipal Act. The methods of capital cost recovery available to municipalities are provided as follows: Recovery Methods

Section Reference

Development Charges Act, 1997

4.1

Municipal Act, 2001 o Fees and Charges o Local Improvements

4.2

Grant Funding

4.3

Reserves/Reserve Funds

4.4

Debenture Financing

4.5

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4.1 Development Charges Act, 1997 The Development Charges Act received Royal Assent on December 8, 1997, replacing the previous Act, which had been in-force since November 23, 1989.

The Province’s stated intentions were to “create new construction jobs and make home ownership more affordable” by reducing the charges and to “make municipal Council decisions more accountable and more cost effective.” The basis for this Act is to allow municipalities to recover the growth-related capital cost of infrastructure necessary to accommodate new growth within the municipality. The Development Charges Act, 1997 as amended, provides for limitations and ceilings on services that can be included in the charges.

The Township does not currently impose D.C.s on new development as a source of funding for anticipated growth-related capital needs. It is noted that the recently completed Lansdowne Serviced Area Infrastructure Assessment and Growth Readiness Study (SNC-Lavalin, 2020) identified a need for additional pump capacity and lagoon wastewater treatment capacity to accommodate future development. As such, the Township should consider implementing development charges to help pay for these capacity upgrades once cost estimates are known.

4.2 Municipal Act The Municipal Act, 2001, came into force on January 1, 2003. Part XII Fees and Charges, gives municipalities the statutory authority to recover the costs of services, including capital costs, through by-law. Municipalities have used these types of charges to recover infrastructure costs associated with the extension of municipal services to private service users, to recover capital improvement costs from existing developments, and to recover growth-related costs of service extensions. These by-laws are typically used where D.C.s would not be applicable (e.g. recovery from existing developments) or where existing and growth-related cost recovery would be simplified under the administration of one by-law.

The Township does not recover capital costs through fees imposed under the Municipal Act.

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4.3 Grant Funding Availability Grant funding has not been utilized as a funding source in this study. To the extent that the Township is successful in securing additional grant funding for future infrastructure needs and the financial impacts are material, the rate forecast may be revisited.

4.4 Existing Reserves/Reserve Funds The Township has an established reserve fund for water and wastewater capital. This reserve fund has been used in the capital funding forecast for rate-based needs. For the purposes of the capital funding forecast, the reserve fund balance has been apportioned equally between the water and wastewater systems. The following table summarizes the water and wastewater reserves/reserve funds utilized in this analysis and the respective estimated January 1, 2020 opening balances.

Table 4-1 Township of Leeds and the Thousand Islands Water and Wastewater Projected Reserve/Reserve Fund Balances Reserve Water Capital Reserve Wastewater Capital Reserve Total

2020 Opening Balance 375,192 375,192 750,384

4.5 Debenture Financing Although it is not a direct method of minimizing the overall cost to the ratepayer, debentures are used by municipalities to assist in cash flowing large capital expenditures.

The Ministry of Municipal Affairs and Housing regulates the level of debt incurred by Ontario municipalities through its powers established under the Municipal Act. O. Reg. 403/02 provides the current rules respecting municipal debt and financial obligations.

Through the rules established under these regulations, a municipality’s debt capacity is

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capped at a level where no more than 25% of the municipality’s own-purpose revenue may be allotted for servicing the debt (i.e. debt charges).

The Township has no outstanding external debt for water or wastewater services, and the capital forecast proposes no debt financing for either the water or wastewater systems.

4.6 Recommended Approach The following table summarizes the recommended capital funding sources supporting the capital needs forecast, for consideration by the Township.

Table 4-2 Township of Leeds and the Thousand Islands 2021 to 2030 Water and Wastewater Capital Funding Program (Inflated $)

Description Provincial/Federal Grants Debenture Requirements Operating Contributions Capital Reserves Total Capital Funding

$ $ $ $ $

Water Wastewater $ $ $ 96,000 $ 99,000 96,000 $ 99,000

Tables 4-3 and 4-4 provide for the full capital expenditure and funding program by year for water and wastewater services, respectively. These capital funding plans are provided in inflated dollars.

Watson & Associates Economists Ltd.

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Table 4-3 Township of Leeds and the Thousand Islands Water Service Capital Budget Forecast (Inflated $) Description Capital Expenditures Replace Flow Meters Replace Well Pump # 1 & Camera Inspection of Well Replace Well Pump # 2 & Camera Inspection of Well Water Meter Replacement Program Total Capital Expenditures Capital Financing Provincial/Federal Grants Debenture Requirements Operating Contributions Water Reserve Total Capital Financing

Total

Budget 2020

Forecast 2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

11,000 15,000 17,000 53,000 96,000

15,000 15,000

17,000 17,000

18,000 18,000

11,000 18,000 29,000

17,000 17,000

-

-

-

-

-

-

96,000 96,000

15,000 15,000

17,000 17,000

18,000 18,000

29,000 29,000

17,000 17,000

-

-

-

-

-

-

Table 4-4 Township of Leeds and the Thousand Islands Wastewater Service Capital Budget Forecast (Inflated $) Description Capital Expenditures Build Shed at SPS Submersible Pump #1 Rebuild / Replace Submersible Pump #2 Rebuild / Replace Water Meter Replacement Program Total Capital Expenditures Capital Financing Provincial/Federal Grants Debenture Requirements Operating Contributions Wastewater Reserve Total Capital Financing

Total

Budget 2020

Forecast 2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

10,000 15,000 21,000 53,000 99,000

15,000 15,000

10,000 17,000 27,000

21,000 18,000 39,000

18,000 18,000

-

-

-

-

-

-

-

99,000 99,000

15,000 15,000

27,000 27,000

39,000 39,000

18,000 18,000

-

-

-

-

-

-

-

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Chapter 5 Net Operating Expenditure Forecast

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5. Net Operating Expenditure Forecast Three scenarios were developed in consultation with Township staff to provide options for Council’s consideration. The scenarios, named Scenario 1, Scenario 2, and Scenario 3, are detailed below and will be referenced throughout the remainder of the report.

Scenario 1: Maintain current rate structure and move towards full lifecycle funding over 10 years Scenario 1 was developed to maintain the Township’s current rate structure (i.e. include 20 m3 of consumption in the monthly base charge) and gradually introduce rate increases over the entire forecast period. This scenario would allow the Township to gradually increase annual contributions towards capital (i.e. annual transfers to capital reserve funds) to full lifecycle funding levels, as identified in section 3.1.4, by the end of the forecast period.

Scenario 2: Modify current rate structure (15 m3 monthly threshold) and move towards full lifecycle funding over 10 years Scenario 2 was developed to modify the Township’s current rate structure (i.e. reduce the amount of consumption included in the monthly base charge to 15 m 3) and gradually introduce rate increases over the entire forecast period.

Per capita and per household consumption levels have steadily declined in recent years. This decline is partially due to individuals’ responses to price signals and conservation efforts, and partially due to a gradual turnover in appliance and pluming fixture stock to newer, more efficient models. The Township’s current rate structure provides for 20 m3 of consumption included in the monthly base charge. This translates to annual consumption of 240 m3, which is higher than the observed average annual consumption per customer identified in Section 2.2 (i.e. 180 m 3 annually). Reducing the amount of consumption included in the monthly base charge to 15 m3 would align with the observed average. As such, the average residential customer would continue to have most of their consumption included in the fixed monthly charge, but customers consuming more than the average would be billed accordingly. This would provide a closer alignment of the monthly bill that a customer receives and their share of total consumption.

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As with Scenario 1, this scenario would also allow the Township to gradually increase annual contributions towards capital (i.e. annual transfers to capital reserve funds) to full lifecycle funding levels, as identified in section 3.1.4, by the end of the forecast period.

Scenario 3: Modify Current Rate Structure (15 m3 Monthly Threshold) and move towards modified lifecycle funding target Scenario 3 was developed to modify the Township’s current rate structure (i.e. reduce amount of consumption included in the monthly base charge to 15 m 3) and gradually introduce rate increases over the entire forecast period.

The rationale for reducing the amount of consumption included in the monthly base charge to 15 m3 is described in detail under Scenario 2 above.

However, instead of targeting full lifecycle funding levels as is the case under the first two scenarios, Scenario 3 limits the annual increases to the monthly base charge to 3.5% annually over the forecast period. It is important to note that this scenario does not achieve full lifecycle funding and therefore does not provide long-term financial sustainability in the traditional sense.

5.1 Operating Expenditures The Township provided its 2020 Operating Budget which formed the basis for the water and wastewater services net operating expenditure forecast, which was further refined through discussions with Township staff. The operating expenditure estimates were generally inflated at 2% annually, reflecting historical Consumer Price Index (C.P.I.) rates.

The Township currently budgets for the water and wastewater system on a combined basis. For the purposes of this rate study, all operating expenditures except OCWA contract costs, were equally allocated between the water and wastewater systems. The OCWA contract costs were allocated 56.7% to Water and 43.3% to Wastewater, consistent with the Township’s 2015 Rate Study.

The operating budget forecast generally includes two components – the operating expenditures and capital-related expenditures. The former is based on the Township’s projected annual spending for ongoing operations and maintenance, while the latter is

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based on the capital funding plan decisions (i.e. transfers to reserve funds, debt repayment, and capital fund transfers) presented earlier.

Capital-related annual expenditures in the forecast include contributions to reserves to support the forecast and future needs. While operating aspects identified above generally increase with inflation over the period (i.e. 2% annually), the capital-related aspects tend to increase more specifically with the increase in capital funding requirements.

As a result, gross operating expenditures for water services are anticipated to increase from $240,200 in 2020, to $292,800 million by 2030. Similarly, for wastewater services annual gross operating expenditures are forecast to increase from $205,200 in 2020, to $250,200 by 2030.

5.2 Operating Revenues The Township has operating revenue sources including interest on accounts, penalties, and rentals that offset some of the annual operating costs. These operating revenues have been forecast over the period with general inflation of 2% annually.

Similar to the apportionment of budgeted operating expenditures, as identified in section 5.1 above, all operating revenues were equally allocated between the water and wastewater systems.

The annual operating revenues for both the water and wastewater systems are forecast to increase from $16,800 in 2020 to $20,400 by 2030.

Tables 5-1 to 5-2, 5-3 to 5-4, and 5-5 to 5-6 provide the water and wastewater operating budget forecasts for Scenarios 1, 2, and 3, respectively. The forecast operating budgets are provided in inflated dollars. Detailed breakdowns of the operating expenditure forecasts can be found in Appendix A for water services and in Appendix B for wastewater services.

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Table 5-1 Township of Leeds and the Thousand Islands Scenario 1 Water Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

84,766 84,766 329,726

101,286 101,286 351,056

120,031 120,031 375,021

139,413 139,413 399,413

161,219 161,219 426,429

183,523 183,523 454,043

208,893 208,893 484,923

234,841 234,841 516,281

264,490 264,490 551,550

294,534 294,534 587,294

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

297,929 14,698 312,626 329,726

318,532 15,124 333,656 351,056

341,649 15,572 357,221 375,021

365,200 16,013 381,213 399,413

391,603 16,327 407,929 426,429

418,497 16,646 435,143 454,043

448,650 16,973 465,623 484,923

479,376 17,305 496,681 516,281

513,819 17,631 531,450 551,550

548,912 17,982 566,894 587,294

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Table 5-2 Township of Leeds and the Thousand Islands Scenario 1 Wastewater Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

104,876 104,876 314,136

122,222 122,222 335,592

139,260 139,260 359,750

162,350 162,350 384,450

185,285 185,285 411,895

209,001 209,001 440,121

235,994 235,994 471,724

263,582 263,582 504,022

295,228 295,228 540,388

327,322 327,322 577,482

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

284,516 12,520 297,036 314,136

305,310 12,882 318,192 335,592

328,513 13,437 341,950 359,750

352,617 13,633 366,250 384,450

379,491 13,905 393,395 411,895

407,046 14,174 421,221 440,121

437,979 14,445 452,424 471,724

469,688 14,734 484,422 504,022

505,283 15,005 520,288 540,388

541,769 15,313 557,082 577,482

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Table 5-3 Township of Leeds and the Thousand Islands Scenario 2 Water Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

84,766 84,766 329,726

101,286 101,286 351,056

120,031 120,031 375,021

139,413 139,413 399,413

161,219 161,219 426,429

183,523 183,523 454,043

208,893 208,893 484,923

234,841 234,841 516,281

264,490 264,490 551,550

294,534 294,534 587,294

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

292,532 20,094 312,626 329,726

312,538 21,118 333,656 351,056

335,009 22,212 357,221 375,021

357,935 23,278 381,213 399,413

384,132 23,798 407,929 426,429

410,848 24,295 435,143 454,043

440,787 24,836 465,623 484,923

471,326 25,354 496,681 516,281

505,552 25,899 531,450 551,550

540,447 26,447 566,894 587,294

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Table 5-4 Township of Leeds and the Thousand Islands Scenario 2 Wastewater Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

104,876 104,876 314,136

122,222 122,222 335,592

139,260 139,260 359,750

162,350 162,350 384,450

185,285 185,285 411,895

209,001 209,001 440,121

235,994 235,994 471,724

263,582 263,582 504,022

295,228 295,228 540,388

327,322 327,322 577,482

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

279,965 17,071 297,036 314,136

300,256 17,936 318,192 335,592

322,840 19,110 341,950 359,750

346,492 19,758 366,250 384,450

373,191 20,205 393,395 411,895

400,598 20,623 421,221 440,121

431,352 21,071 452,424 471,724

462,901 21,520 484,422 504,022

498,316 21,972 520,288 540,388

534,631 22,451 557,082 577,482

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Table 5-5 Township of Leeds and the Thousand Islands Scenario 3 Water Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

80,725 80,725 325,685

88,301 88,301 338,071

97,056 97,056 352,046

105,467 105,467 365,467

114,555 114,555 379,765

123,061 123,061 393,581

133,047 133,047 409,077

142,414 142,414 423,854

153,555 153,555 440,615

163,785 163,785 456,545

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

288,491 20,094 308,585 325,685

299,553 21,118 320,671 338,071

312,034 22,212 334,246 352,046

323,989 23,278 347,267 365,467

337,468 23,798 361,265 379,765

350,386 24,295 374,681 393,581

364,941 24,836 389,777 409,077

378,900 25,354 404,254 423,854

394,617 25,899 420,515 440,615

409,698 26,447 436,145 456,545

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PAGE 5-8

Table 5-6 Township of Leeds and the Thousand Islands Scenario 3 Wastewater Service Operating Budget Forecast (Inflated $) Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

97,295 97,295 306,555

104,794 104,794 318,164

111,033 111,033 331,523

121,758 121,758 343,858

130,721 130,721 357,331

139,227 139,227 370,347

149,207 149,207 384,937

158,426 158,426 398,866

169,496 169,496 414,656

179,515 179,515 429,675

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

272,384 17,071 289,455 306,555

282,828 17,936 300,764 318,164

294,613 19,110 313,723 331,523

305,900 19,758 325,658 343,858

318,626 20,205 338,831 357,331

330,824 20,623 351,447 370,347

344,566 21,071 365,637 384,937

357,746 21,520 379,266 398,866

372,585 21,972 394,556 414,656

386,824 22,451 409,275 429,675

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PAGE 5-9

Chapter 6 Forecast Water and Wastewater Rates

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6. Forecast Water and Wastewater Rates To summarize the analysis undertaken thus far, Chapter 3 reviewed capital-related issues for all customers within the water and wastewater systems and responds to the lifecycle needs of the Township. Chapter 4 provided a review of capital financing options of which internal sources (i.e. reserve fund transfers) will be the basis for financing future capital needs. Chapter 5 established the 10-year operating forecast of expenditures for the Township’s water and wastewater systems. This chapter presents the calculated rates for the next 10-year period. These calculations are based on the net operating expenditures identified in Chapter 5, divided by the volumes forecast provided in Section 2.2.

6.1 Water Rates The calculated rate forecasts for Scenarios 1 and 2 are provided to address full costs of the municipal systems, including annual operating and capital expenditures from a lifecycle perspective. The calculated rate forecast for Scenario 3 is provided to address full operating costs of the municipal system and limit base charge rate increases to 3.5% annually.

To achieve the objectives identified above, water base charge rates would be required to increase by: •

Scenario 1 o 2021: 6.9% o 2022-2030: 6.5% to 6.6% annually

•

Scenario 2 o 2021: 4.9% o 2022-2030: 6.5% to 6.6% annually

•

Scenario 3 o 2021-2030: 3.5% annually

These increases would provide the Township with revenue certainty as they would allow for a large share of capital-related expenditures to be funded through a consistent revenue source (i.e. base charge revenues).

Furthermore, consumptive rates would be required to increase/decrease by:

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•

•

Scenario 1 o 2021: -3.7% o 2022-2030: 1.3% to 1.7% annually Scenarios 2 and 3 o 2021: -6.1% o 2022-2030: 1.3% to 1.7% annually

Scenario 1 would maintain the Township’s current rate structure of only billing monthly consumption in excess of 20 m3, while Scenarios 2 and 3 would lower this threshold to 15 m3. The reduction in the consumptive rates in the first year of the forecast (i.e. 2021) is reflective of the greater share of billing revenues recovered through the base charges.

The resultant rate forecasts for Scenarios 1, 2, and 3 are presented below in Tables 6-1 to 6-3, respectively. The detailed financial forecast and rate calculations for water services are provided in Appendix A to this report.

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Table 6-1 Township of Leeds and the Thousand Islands Scenario 1 Water Rate Forecast Description 3 Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Annual Increase (%)

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ $

2.980 3.940

$ $

2.870 $ 3.794 $ -3.7%

2.915 $ 3.854 $ 1.6%

2.955 $ 3.907 $ 1.4%

3.001 $ 3.968 $ 1.6%

3.043 $ 4.023 $ 1.4%

3.093 $ 4.090 $ 1.7%

3.137 $ 4.147 $ 1.4%

3.189 $ 4.216 $ 1.7%

3.231 $ 4.272 $ 1.3%

3.287 4.345 1.7%

$ $

75.05 91.13

$ $

80.22 $ 97.41 $ 6.9%

85.49 $ 103.81 $ 6.6%

91.11 $ 110.63 $ 6.6%

97.08 $ 117.88 $ 6.6%

103.43 $ 125.60 $ 6.5%

110.19 $ 133.80 $ 6.5%

117.39 $ 142.54 $ 6.5%

125.03 $ 151.82 $ 6.5%

133.18 $ 161.72 $ 6.5%

141.84 172.23 6.5%

Table 6-2 Township of Leeds and the Thousand Islands Scenario 2 Water Rate Forecast Description

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Monthly Base Charge (includes 15 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

2.980 3.940

$ $

75.05 91.13

$ $

2.797 $ 3.698 $ -6.1%

2.835 $ 3.748 $ 1.4%

2.866 $ 3.790 $ 1.1%

2.904 $ 3.840 $ 1.3%

2.944 $ 3.892 $ 1.4%

2.993 $ 3.957 $ 1.7%

3.034 $ 4.011 $ 1.4%

3.084 $ 4.078 $ 1.7%

3.124 $ 4.131 $ 1.3%

3.177 4.201 1.7%

$ $

78.76 $ 95.64 $ 4.9%

83.88 $ 101.85 $ 6.5%

89.34 $ 108.48 $ 6.5%

95.14 $ 115.53 $ 6.5%

101.46 $ 123.20 $ 6.6%

108.18 $ 131.35 $ 6.6%

115.33 $ 140.04 $ 6.6%

122.93 $ 149.27 $ 6.6%

131.04 $ 159.12 $ 6.6%

139.65 169.57 6.6%

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PAGE 6-3

Table 6-3 Township of Leeds and the Thousand Islands Scenario 3 Water Rate Forecast Description

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Monthly Base Charge (includes 15 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

2.980 3.940

$ $

75.05 91.13

$ $

2.797 $ 3.698 $ -6.1%

2.835 $ 3.748 $ 1.4%

2.866 $ 3.790 $ 1.1%

2.904 $ 3.840 $ 1.3%

2.944 $ 3.892 $ 1.4%

2.993 $ 3.957 $ 1.7%

3.034 $ 4.011 $ 1.4%

3.084 $ 4.078 $ 1.7%

3.124 $ 4.131 $ 1.3%

3.177 4.201 1.7%

$ $

77.68 $ 94.32 $ 3.5%

80.40 $ 97.62 $ 3.5%

83.21 $ 101.04 $ 3.5%

86.12 $ 104.57 $ 3.5%

89.14 $ 108.23 $ 3.5%

92.26 $ 112.02 $ 3.5%

95.48 $ 115.94 $ 3.5%

98.83 $ 120.00 $ 3.5%

102.29 $ 124.20 $ 3.5%

105.87 128.55 3.5%

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PAGE 6-4

6.2 Wastewater Rates The calculated rate forecasts for Scenarios 1 and 2 are provided to address full costs of the municipal systems, including annual operating and capital expenditures from both a lifecycle perspective. The calculated rate forecast for Scenario 3 is provided to address full operating costs of the municipal system and provide sufficient balances in the reserve funds by 2034 to fund replacement of half of the Town’s wastewater mains.

To achieve the objectives identified above, wastewater base charge rates would be required to increase by: •

•

•

Scenario 1 o 2021: 8.1% o 2022-2030: 6.9% to 7.0% annually Scenario 2 o 2021: 6.4% o 2022-2030: 6.8% to 7.0% annually Scenario 3 o 2021-2030: 3.5% annually

These increases would provide the Township with revenue certainty as they would allow for a large share of capital-related expenditures to be funded through a consistent revenue source (i.e. base charge revenues).

Furthermore, consumptive rates would be required to increase/decrease by: •

Scenario 1 o 2021: -18.8% o 2022: 1.6% o 2023: 2.7% o 2024: 0.2% o 2025-2030: 1.3% to 1.8% annually

•

Scenarios 2 and 3 o 2021: -20.9% o 2022: 1.4% o 2023: 2.5% o 2024: 0.0%

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o 2025-2030: 1.3% to 1.8% annually Scenario 1 would maintain the Township’s current rate structure of only billing monthly consumption in excess of 20 m3, while Scenarios 2 and 3 would lower this threshold to 15 m3. The reductions in the consumptive rates in the first year of the forecast (i.e.

2021) is reflective of the greater share of billing revenues recovered through the base charges.

The resultant rate forecasts for Scenarios 1, 2, and 3 are presented below in Tables 6-4 to 6-6, respectively. The detailed financial forecast and rate calculations for wastewater services are provided in Appendix B to this report.

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Table 6-4 Township of Leeds and the Thousand Islands Scenario 1 Wastewater Rate Forecast Description 3 Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Annual Increase (%)

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ $

2.980 4.000

$ $

2.418 $ 3.246 $ -18.8%

2.457 $ 3.298 $ 1.6%

2.523 $ 3.387 $ 2.7%

2.529 $ 3.394 $ 0.2%

2.565 $ 3.443 $ 1.4%

2.607 $ 3.500 $ 1.7%

2.642 $ 3.547 $ 1.3%

2.688 $ 3.608 $ 1.7%

2.722 $ 3.654 $ 1.3%

2.771 3.719 1.8%

$ $

70.86 86.04

$ $

76.61 $ 93.02 $ 8.1%

81.94 $ 99.49 $ 7.0%

87.60 $ 106.37 $ 6.9%

93.73 $ 113.81 $ 7.0%

100.24 $ 121.71 $ 6.9%

107.17 $ 130.13 $ 6.9%

114.59 $ 139.14 $ 6.9%

122.51 $ 148.75 $ 6.9%

130.97 $ 159.03 $ 6.9%

139.99 169.98 6.9%

Table 6-5 Township of Leeds and the Thousand Islands Scenario 2 Wastewater Rate Forecast Description

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Monthly Base Charge (includes 15 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

2.980 4.000

$ $

70.86 86.04

$ $

2.357 $ 3.164 $ -20.9%

2.389 $ 3.207 $ 1.4%

2.448 $ 3.286 $ 2.5%

2.447 $ 3.285 $ 0.0%

2.482 $ 3.331 $ 1.4%

2.522 $ 3.386 $ 1.6%

2.556 $ 3.431 $ 1.3%

2.599 $ 3.489 $ 1.7%

2.632 $ 3.533 $ 1.3%

2.678 3.595 1.8%

$ $

75.38 $ 91.53 $ 6.4%

80.58 $ 97.85 $ 6.9%

86.09 $ 104.53 $ 6.8%

92.10 $ 111.83 $ 7.0%

98.57 $ 119.69 $ 7.0%

105.48 $ 128.07 $ 7.0%

112.86 $ 137.04 $ 7.0%

120.74 $ 146.60 $ 7.0%

129.16 $ 156.84 $ 7.0%

138.15 167.74 7.0%

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PAGE 6-7

Table 6-6 Township of Leeds and the Thousand Islands Scenario 3 Wastewater Rate Forecast Description

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%) Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Monthly Base Charge (includes 15 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

2.980 4.000

$ $

70.86 86.04

$ $

2.357 $ 3.164 $ -20.9%

2.389 $ 3.207 $ 1.4%

2.448 $ 3.286 $ 2.5%

2.447 $ 3.285 $ 0.0%

2.482 $ 3.331 $ 1.4%

2.522 $ 3.386 $ 1.6%

2.556 $ 3.431 $ 1.3%

2.599 $ 3.489 $ 1.7%

2.632 $ 3.533 $ 1.3%

2.678 3.595 1.8%

$ $

73.34 $ 89.05 $ 3.5%

75.91 $ 92.17 $ 3.5%

78.56 $ 95.39 $ 3.5%

81.31 $ 98.73 $ 3.5%

84.16 $ 102.19 $ 3.5%

87.11 $ 105.77 $ 3.5%

90.15 $ 109.47 $ 3.5%

93.31 $ 113.30 $ 3.5%

96.57 $ 117.26 $ 3.5%

99.96 121.37 3.5%

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6.3 Forecast Water and Wastewater Rate Impacts Tables 6-7 to 6-10 summarize the impacts of the recommended rates on four types of customers: • •

Typical residential customer with a 1 ½” meter consuming 180 m3 per year; Medium residential customer with a 1 ½” meter consuming 240 m3 per year;

• •

Large residential customer with a 1 ½” meter consuming 270 m3 per year; and Non-residential customer with a 2” meter consuming 1,570 m3 per year.

At current rates, the annual water and wastewater bill for a typical residential customer would total approximately $1,751 (i.e. $901 for water and $850 for wastewater). Under Scenario 1 the proposed 2021 annual bill would be approximately $1,882 (i.e. $963 for water and $919 for wastewater). This represents a $131 (7.5%) increase relative to what the bill would be based on the rates that are currently in effect. The annual water and wastewater bill for a typical residential customer would further increase by approximately 6.7% to 6.8% annually over the remainder of the forecast period. Under Scenario 2 the proposed 2021 annual bill would be approximately $1,850 (i.e. $945 for water and $905 for wastewater). This represents a $99 (5.6%) increase relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for a typical residential customer would further increase by approximately 6.7% to 6.8% annually over the remainder of the forecast period. Lastly, under Scenario 3 the proposed 2021 annual bill would be approximately $1,812 (i.e. $932 for water and $880 for wastewater). This represents a $61 (3.5%) increase relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for a typical residential customer would further increase by approximately 3.5% annually over the remainder of the forecast period.

A medium residential customer could expect an annual water and wastewater bill of approximately $1,751 (i.e. $901 for water and $850 for wastewater) at current rates.

Under Scenario 1 the proposed 2021 annual bill would be approximately $1,882 (i.e. $963 for water and $919 for wastewater). This represents a $131 (7.5%) increase relative to what the bill would be based on the rates that are currently in effect. The annual water and wastewater bill for a medium residential customer would further increase by approximately 6.7% to 6.8% annually over the remainder of the forecast period. Under Scenario 2 the proposed 2021 annual bill would be approximately $2,159

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(i.e. $1,113 for water and $1,046 for wastewater). This represents a $408 (23.3%) increase relative to what the bill would be, based on the rates that are currently in effect.

The annual water and wastewater bill for a medium residential customer would further increase by 5.9 to 6.3% annually over the remainder of the forecast period. Lastly, under Scenario 3 the proposed 2021 annual bill would be approximately $2,121 (i.e. $1,100 for water and $1,022 for wastewater). This represents a $371 (21.2%) increase relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for a medium residential customer would further increase by approximately 3.1% to 3.3% annually over the remainder of the forecast period.

A large residential customer could expect an annual water and wastewater bill of approximately $1,930 (i.e. $990 for water and $940 for wastewater) at current rates.

Under Scenario 1 the proposed 2021 annual bill would be approximately $2,041 (i.e. $1,049 for water and $992 for wastewater). This represents a $111 (5.7%) increase relative to what the bill would be based on the rates that are currently in effect. The annual water and wastewater bill for a large residential customer would further increase by approximately 6.4% annually over the remainder of the forecast period. Under Scenario 2 the proposed 2021 annual bill would be approximately $2,314 (i.e. $1,197 for water and $1,117 for wastewater). This represents a $384 (19.9%) increase relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for a large residential customer would further increase by 5.6% to 6.0% annually over the remainder of the forecast period. Lastly, under Scenario 3 the proposed 2021 annual bill would be approximately $2,276 (i.e. $1,184 for water and $1,092 for wastewater). This represents a $346 (17.9%) increase relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for a large residential customer would further increase by approximately 2.9% to 3.2% annually over the remainder of the forecast period.

The annual water and wastewater bill for a hypothetical non-residential customer would total approximately $12,686 (i.e. $6,334 for water and $6,352 for wastewater) at current rates. Under Scenario 1 the proposed 2021 annual bill would be approximately $11,649 (i.e. $6,215 for water and $5,434 for wastewater). This represents a $1,037 (-8.2%) decrease relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for this hypothetical non-residential customer would further increase by approximately 2.2% to 3.1% annually over the

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remainder of the forecast period. Under Scenario 2 the proposed 2021 annual bill would be approximately $11,784 (i.e. $6,288 for water and $5,496 for wastewater). This represents a $902 (-7.1%) decrease relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for this hypothetical non-residential customer would further increase by 1.9% to 3.0% annually over the remainder of the forecast period. Lastly, under Scenario 3 the proposed 2021 annual bill would be approximately $11,739 (i.e. $6,272 for water and $5,467 for wastewater). This represents a $947 (-7.5%) decrease relative to what the bill would be, based on the rates that are currently in effect. The annual water and wastewater bill for this hypothetical non-residential customer would further increase by 1.2% to 2.1% annually over the remainder of the forecast period.

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Table 6-7 Township of Leeds and the Thousand Islands Annual Water and Wastewater Bill Impact – Typical Residential Scenario Annual Water & Wastewater Scenario 1 Water Bill Wastewater Bill Total Scenario 1 Scenario 2 Water Bill Wastewater Bill Total Scenario 2 Scenario 3 Water Bill Wastewater Bill Total Scenario 3 Annual Increase ($) Scenario 1 Scenario 2 Scenario 3 Annual Increase (%) Scenario 1 Scenario 2 Scenario 3

2020 Bill

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ 901 $ 963 $ 1,026 $ 1,093 $ 1,165 $ 1,241 $ 1,322 $ 1,409 $ 1,500 $ 1,598 $ 1,702 $ 850 $ 919 $ 983 $ 1,051 $ 1,125 $ 1,203 $ 1,286 $ 1,375 $ 1,470 $ 1,572 $ 1,680 $ 1,751 $ 1,882 $ 2,009 $ 2,145 $ 2,290 $ 2,444 $ 2,608 $ 2,784 $ 2,970 $ 3,170 $ 3,382 $ 901 $ 945 $ 1,007 $ 1,072 $ 1,142 $ 1,218 $ 1,298 $ 1,384 $ 1,475 $ 1,572 $ 1,676 $ 850 $ 905 $ 967 $ 1,033 $ 1,105 $ 1,183 $ 1,266 $ 1,354 $ 1,449 $ 1,550 $ 1,658 $ 1,751 $ 1,850 $ 1,974 $ 2,105 $ 2,247 $ 2,400 $ 2,564 $ 2,738 $ 2,924 $ 3,122 $ 3,334 $ 901 $ 932 $ 965 $ 999 $ 1,033 $ 1,070 $ 1,107 $ 1,146 $ 1,186 $ 1,227 $ 1,270 $ 850 $ 880 $ 911 $ 943 $ 976 $ 1,010 $ 1,045 $ 1,082 $ 1,120 $ 1,159 $ 1,199 $ 1,751 $ 1,812 $ 1,876 $ 1,941 $ 2,009 $ 2,080 $ 2,152 $ 2,228 $ 2,306 $ 2,386 $ 2,470 $ $ $

131 $ 99 $ 61 $ 7.5% 5.6% 3.5%

127 $ 124 $ 63 $ 6.8% 6.7% 3.5%

135 $ 132 $ 66 $ 6.7% 6.7% 3.5%

145 $ 142 $ 68 $ 6.8% 6.7% 3.5%

154 $ 153 $ 70 $ 6.7% 6.8% 3.5%

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164 $ 163 $ 73 $ 6.7% 6.8% 3.5%

175 $ 174 $ 75 $ 6.7% 6.8% 3.5%

187 $ 186 $ 78 $ 6.7% 6.8% 3.5%

199 $ 198 $ 81 $ 6.7% 6.8% 3.5%

212 211 84 6.7% 6.8% 3.5%

PAGE 6-12

Table 6-8 Township of Leeds and the Thousand Islands Annual Water and Wastewater Bill Impact – Medium Residential Scenario Annual Water & Wastewater Scenario 1 Water Bill Wastewater Bill Total Scenario 1 Scenario 2 Water Bill Wastewater Bill Total Scenario 2 Scenario 3 Water Bill Wastewater Bill Total Scenario 3 Annual Increase ($) Scenario 1 Scenario 2 Scenario 3 Annual Increase (%) Scenario 1 Scenario 2 Scenario 3

2020 Bill

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ 901 $ 963 $ 1,026 $ 1,093 $ 1,165 $ 1,241 $ 1,322 $ 1,409 $ 1,500 $ 1,598 $ 1,702 $ 850 $ 919 $ 983 $ 1,051 $ 1,125 $ 1,203 $ 1,286 $ 1,375 $ 1,470 $ 1,572 $ 1,680 $ 1,751 $ 1,882 $ 2,009 $ 2,145 $ 2,290 $ 2,444 $ 2,608 $ 2,784 $ 2,970 $ 3,170 $ 3,382 $ 901 $ 1,113 $ 1,177 $ 1,244 $ 1,316 $ 1,394 $ 1,478 $ 1,566 $ 1,660 $ 1,760 $ 1,866 $ 850 $ 1,046 $ 1,110 $ 1,180 $ 1,252 $ 1,332 $ 1,417 $ 1,508 $ 1,605 $ 1,708 $ 1,818 $ 1,751 $ 2,159 $ 2,287 $ 2,424 $ 2,568 $ 2,726 $ 2,895 $ 3,074 $ 3,265 $ 3,468 $ 3,685 $ 901 $ 1,100 $ 1,135 $ 1,170 $ 1,208 $ 1,246 $ 1,287 $ 1,328 $ 1,371 $ 1,415 $ 1,461 $ 850 $ 1,022 $ 1,054 $ 1,090 $ 1,123 $ 1,159 $ 1,197 $ 1,235 $ 1,276 $ 1,317 $ 1,360 $ 1,751 $ 2,121 $ 2,189 $ 2,260 $ 2,330 $ 2,405 $ 2,483 $ 2,563 $ 2,647 $ 2,732 $ 2,821 $ $ $

131 $ 408 $ 371 $ 7.5% 23.3% 21.2%

127 $ 128 $ 68 $ 6.8% 5.9% 3.2%

135 $ 137 $ 71 $ 6.7% 6.0% 3.2%

145 $ 144 $ 70 $ 6.8% 5.9% 3.1%

154 $ 158 $ 75 $ 6.7% 6.1% 3.2%

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164 $ 169 $ 78 $ 6.7% 6.2% 3.2%

175 $ 179 $ 80 $ 6.7% 6.2% 3.2%

187 $ 191 $ 84 $ 6.7% 6.2% 3.3%

199 $ 203 $ 85 $ 6.7% 6.2% 3.2%

212 217 89 6.7% 6.3% 3.3%

PAGE 6-13

Table 6-9 Township of Leeds and the Thousand Islands Annual Water and Wastewater Bill Impact – Large Residential Scenario Annual Water & Wastewater Scenario 1 Water Bill Wastewater Bill Total Scenario 1 Scenario 2 Water Bill Wastewater Bill Total Scenario 2 Scenario 3 Water Bill Wastewater Bill Total Scenario 3 Annual Increase ($) Scenario 1 Scenario 2 Scenario 3 Annual Increase (%) Scenario 1 Scenario 2 Scenario 3

2020 Bill

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ 990 $ 1,049 $ 1,113 $ 1,182 $ 1,255 $ 1,332 $ 1,415 $ 1,503 $ 1,596 $ 1,695 $ 1,801 $ 940 $ 992 $ 1,057 $ 1,127 $ 1,201 $ 1,280 $ 1,364 $ 1,454 $ 1,551 $ 1,653 $ 1,763 $ 1,930 $ 2,041 $ 2,170 $ 2,309 $ 2,456 $ 2,612 $ 2,779 $ 2,957 $ 3,147 $ 3,348 $ 3,564 $ 990 $ 1,197 $ 1,262 $ 1,330 $ 1,403 $ 1,482 $ 1,567 $ 1,657 $ 1,753 $ 1,854 $ 1,962 $ 940 $ 1,117 $ 1,182 $ 1,253 $ 1,326 $ 1,406 $ 1,493 $ 1,584 $ 1,683 $ 1,787 $ 1,899 $ 1,930 $ 2,314 $ 2,444 $ 2,583 $ 2,729 $ 2,889 $ 3,060 $ 3,241 $ 3,436 $ 3,641 $ 3,861 $ 990 $ 1,184 $ 1,220 $ 1,256 $ 1,295 $ 1,335 $ 1,376 $ 1,419 $ 1,463 $ 1,509 $ 1,556 $ 940 $ 1,092 $ 1,126 $ 1,163 $ 1,196 $ 1,233 $ 1,272 $ 1,312 $ 1,354 $ 1,396 $ 1,441 $ 1,930 $ 2,276 $ 2,346 $ 2,420 $ 2,491 $ 2,568 $ 2,649 $ 2,731 $ 2,817 $ 2,904 $ 2,997 $ $ $

111 $ 384 $ 346 $ 5.7% 19.9% 17.9%

130 $ 130 $ 70 $ 6.4% 5.6% 3.1%

139 $ 140 $ 74 $ 6.4% 5.7% 3.1%

147 $ 145 $ 71 $ 6.4% 5.6% 2.9%

157 $ 160 $ 77 $ 6.4% 5.9% 3.1%

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167 $ 171 $ 81 $ 6.4% 5.9% 3.1%

178 $ 181 $ 82 $ 6.4% 5.9% 3.1%

190 $ 194 $ 86 $ 6.4% 6.0% 3.2%

202 $ 205 $ 87 $ 6.4% 6.0% 3.1%

215 220 92 6.4% 6.0% 3.2%

PAGE 6-14

Table 6-10 Township of Leeds and the Thousand Islands Annual Water and Wastewater Bill Impact – Non-Residential Scenario Annual Water & Wastewater Scenario 1 Water Bill Wastewater Bill Total Scenario 1 Scenario 2 Water Bill Wastewater Bill Total Scenario 2 Scenario 3 Water Bill Wastewater Bill Total Scenario 3 Annual Increase ($) Scenario 1 Scenario 2 Scenario 3 Annual Increase (%) Scenario 1 Scenario 2 Scenario 3

2020 Bill

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

$ 6,334 $ 6,215 $ 6,372 $ 6,524 $ 6,691 $ 6,857 $ 7,045 $ 7,226 $ 7,430 $ 7,623 $ 7,846 $ 6,352 $ 5,434 $ 5,580 $ 5,781 $ 5,880 $ 6,039 $ 6,216 $ 6,387 $ 6,584 $ 6,768 $ 6,986 $ 12,686 $ 11,649 $ 11,952 $ 12,305 $ 12,572 $ 12,897 $ 13,261 $ 13,613 $ 14,013 $ 14,391 $ 14,832 $ 6,334 $ 6,288 $ 6,432 $ 6,570 $ 6,724 $ 6,889 $ 7,076 $ 7,256 $ 7,459 $ 7,651 $ 7,874 $ 6,352 $ 5,496 $ 5,632 $ 5,821 $ 5,908 $ 6,066 $ 6,243 $ 6,413 $ 6,609 $ 6,793 $ 7,010 $ 12,686 $ 11,784 $ 12,064 $ 12,391 $ 12,632 $ 12,955 $ 13,319 $ 13,669 $ 14,068 $ 14,444 $ 14,884 $ 6,334 $ 6,272 $ 6,381 $ 6,480 $ 6,592 $ 6,709 $ 6,844 $ 6,967 $ 7,108 $ 7,232 $ 7,382 $ 6,352 $ 5,467 $ 5,564 $ 5,712 $ 5,751 $ 5,856 $ 5,975 $ 6,082 $ 6,209 $ 6,318 $ 6,454 $ 12,686 $ 11,739 $ 11,945 $ 12,192 $ 12,344 $ 12,565 $ 12,820 $ 13,049 $ 13,317 $ 13,550 $ 13,835 $ (1,037) $ $ (902) $ $ (947) $ -8.2% -7.1% -7.5%

303 $ 279 $ 206 $ 2.6% 2.4% 1.8%

353 $ 327 $ 247 $ 3.0% 2.7% 2.1%

267 $ 241 $ 152 $ 2.2% 1.9% 1.2%

325 $ 323 $ 222 $ 2.6% 2.6% 1.8%

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365 $ 364 $ 254 $ 2.8% 2.8% 2.0%

352 $ 349 $ 229 $ 2.7% 2.6% 1.8%

400 $ 400 $ 269 $ 2.9% 2.9% 2.1%

378 $ 376 $ 233 $ 2.7% 2.7% 1.7%

441 440 285 3.1% 3.0% 2.1%

PAGE 6-15

6.4 Summary In summary, it is recommended that the Township adopts Scenario 3 presented above.

This scenario embraces Council’s intent, expressed at a public meeting on December 14, 2020, to adopt rate increases to the monthly charge of 3.5% annually. This scenario would reduce the minimum billing threshold from 20 to 15 cubic meters per month, which will move the Township closer towards alignment between the monthly bill that a customer receives and their share of total consumption. However, it is noted that this scenario does not produce a rate forecast that embraces the full lifecycle costs of infrastructure supporting water and wastewater services.

It is noted that during the next update of this rate study, and once the anomalies with consumption records have been addressed, the Township should explore additional rate structure alternatives. More specifically, the Township should consider the option of a monthly base charge combined with a constant consumptive rate. This would be similar to the Township’s existing rate structure, however the monthly base charge in this option would not be a minimum charge. Therefore, each customer would pay a base monthly charge as well as a consumptive charge, with the consumptive charge being applicable to all metered consumption by that customer. This type of rate structure is widely used in Ontario and can ensure a good balance between providing revenue stability to the Township and promoting water conservation.

6.5 Recommendations Based upon the analysis in this report, the following recommendations are provided for Council’s consideration: 1. That Council provide for the recovery of all water and wastewater costs through full cost recovery rates and maintain reserve funds for water and wastewater services; 2. That Council approve the rate forecast presented under Scenario 3, and direct staff to review the Rate Study in five years; 3. That Council approve the Rate Study;

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4. That Council direct staff to update this study ahead of the five-year cycle if, after correcting the consumption record anomalies, differences of more than 10% are found between actual water consumption and the estimates identified in Section 2.2; and 5. That Council direct staff to update this study ahead of the five-year cycle if future asset management planning identifies lifecycle needs that differ by more than 10% from the estimates presented in Section 3.1.

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Appendices

Appendix A Water Services

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Description Capital Expenditures Replace Flow Meters Replace Well Pump # 1 & Camera Inspection of Well Replace Well Pump # 2 & Camera Inspection of Well Water Meter Replacement Program Total Capital Expenditures

Total

Table W-1a Township of Leeds and the Thousand Islands Water Service Capital Budget Forecast Uninflated $ Budget

Forecast

2024

2025

2026

2027

2028

2029

2030

10,000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

15,000

-

-

-

-

-

-

16,380 16,380

16,380 16,380

16,380 26,380

15,000

-

-

-

-

-

-

2020

2021

2022

10,000

-

-

-

15,000

15,000

-

15,000

-

49,140 89,140

15,000

2023

Table W-1 Township of Leeds and the Thousand Islands Water Service Capital Budget Forecast Inflated $ Description Capital Expenditures Replace Flow Meters Replace Well Pump # 1 & Camera Inspection of Well Replace Well Pump # 2 & Camera Inspection of Well Water Meter Replacement Program Total Capital Expenditures Capital Financing Provincial/Federal Grants Debenture Requirements Operating Contributions Water Reserve Total Capital Financing

Total

Forecast

Budget 2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

11,000 15,000 17,000 53,000 96,000

15,000 15,000

17,000 17,000

18,000 18,000

11,000 18,000 29,000

17,000 17,000

-

-

-

-

-

-

96,000 96,000

15,000 15,000

17,000 17,000

18,000 18,000

29,000 29,000

17,000 17,000

-

-

-

-

-

-

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PAGE A-2

Table W-2 Township of Leeds and the Thousand Islands Water Service Schedule of Debenture Repayments Inflated $ Debenture Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total Annual Debt Charges

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Principal (Inflated) -

2020

-

Forecast 2021

2022 -

2023 -

2024 -

2025 -

2026 -

2027 -

2028 -

2029 -

2030 -

-

-

-

-

-

-

-

-

-

-

Table W-3 Township of Leeds and the Thousand Islands Water Service Scenario 1 Water Reserve Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 429,786 502,603 596,752 705,369 69,594 89,816 112,150 137,617 164,635 15,000 17,000 18,000 29,000 17,000 429,786 502,603 596,752 705,369 853,004 -

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2025 853,004 195,241 1,048,245 -

2026 1,048,245 227,439 1,275,684 -

2027 1,275,684 264,180 1,539,864 -

2028 1,539,864 302,810 1,842,674 -

2029 1,842,674 347,001 2,189,675 -

2030 2,189,675 393,155 2,582,830 -

PAGE A-3

Table W-4 Township of Leeds and the Thousand Islands Water Services Scenario 1 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

84,766 84,766 329,726

101,286 101,286 351,056

120,031 120,031 375,021

139,413 139,413 399,413

161,219 161,219 426,429

183,523 183,523 454,043

208,893 208,893 484,923

234,841 234,841 516,281

264,490 264,490 551,550

294,534 294,534 587,294

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

297,929 14,698 312,626 329,726

318,532 15,124 333,656 351,056

341,649 15,572 357,221 375,021

365,200 16,013 381,213 399,413

391,603 16,327 407,929 426,429

418,497 16,646 435,143 454,043

448,650 16,973 465,623 484,923

479,376 17,305 496,681 516,281

513,819 17,631 531,450 551,550

548,912 17,982 566,894 587,294

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PAGE A-4

Table W-5 Township of Leeds and the Thousand Islands Water Services Scenario 1 Water Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

Volume Charges ($/m 3) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 3.940

$ $

2.870 $ 3.794 $ -3.7%

2.915 $ 3.854 $ 1.6%

2.955 $ 3.907 $ 1.4%

3.001 $ 3.968 $ 1.6%

3.043 $ 4.023 $ 1.4%

3.093 $ 4.090 $ 1.7%

3.137 $ 4.147 $ 1.4%

3.189 $ 4.216 $ 1.7%

3.231 $ 4.272 $ 1.3%

3.287 4.345 1.7%

Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

75.05 91.13

$ $

80.22 $ 97.41 $ 6.9%

85.49 $ 103.81 $ 6.6%

91.11 $ 110.63 $ 6.6%

97.08 $ 117.88 $ 6.6%

103.43 $ 125.60 $ 6.5%

110.19 $ 133.80 $ 6.5%

117.39 $ 142.54 $ 6.5%

125.03 $ 151.82 $ 6.5%

133.18 $ 161.72 $ 6.5%

141.84 172.23 6.5%

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Table W-6 Township of Leeds and the Thousand Islands Water Service Scenario 2 Water Reserve Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 429,786 497,553 580,838 671,869 69,594 84,766 101,286 120,031 139,413 15,000 17,000 18,000 29,000 17,000 429,786 497,553 580,838 671,869 794,282 -

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2025 794,282 161,219 955,502 -

2026 955,502 183,523 1,139,025 -

2027 1,139,025 208,893 1,347,917 -

2028 1,347,917 234,841 1,582,758 -

2029 1,582,758 264,490 1,847,248 -

2030 1,847,248 294,534 2,141,782 -

PAGE A-5

Table W-7 Township of Leeds and the Thousand Islands Water Services Scenario 2 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

84,766 84,766 329,726

101,286 101,286 351,056

120,031 120,031 375,021

139,413 139,413 399,413

161,219 161,219 426,429

183,523 183,523 454,043

208,893 208,893 484,923

234,841 234,841 516,281

264,490 264,490 551,550

294,534 294,534 587,294

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

292,532 20,094 312,626 329,726

312,538 21,118 333,656 351,056

335,009 22,212 357,221 375,021

357,935 23,278 381,213 399,413

384,132 23,798 407,929 426,429

410,848 24,295 435,143 454,043

440,787 24,836 465,623 484,923

471,326 25,354 496,681 516,281

505,552 25,899 531,450 551,550

540,447 26,447 566,894 587,294

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PAGE A-6

Table W-8 Township of Leeds and the Thousand Islands Water Services Scenario 2 Water Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 3.940

$ $

75.05 91.13

$ $

2.797 $ 3.698 $ -6.1%

2.835 $ 3.748 $ 1.4%

2.866 $ 3.790 $ 1.1%

2.904 $ 3.840 $ 1.3%

2.944 $ 3.892 $ 1.4%

2.993 $ 3.957 $ 1.7%

3.034 $ 4.011 $ 1.4%

3.084 $ 4.078 $ 1.7%

3.124 $ 4.131 $ 1.3%

3.177 4.201 1.7%

$ $

78.76 $ 95.64 $ 4.9%

83.88 $ 101.85 $ 6.5%

89.34 $ 108.48 $ 6.5%

95.14 $ 115.53 $ 6.5%

101.46 $ 123.20 $ 6.6%

108.18 $ 131.35 $ 6.6%

115.33 $ 140.04 $ 6.6%

122.93 $ 149.27 $ 6.6%

131.04 $ 159.12 $ 6.6%

139.65 169.57 6.6%

3

Monthly Base Charge (includes 20 m ) 1 ½" or less 2" or greater 3

Monthly Base Charge (includes 15 m ) 1 ½" or less 2" or greater Annual Increase (%)

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Table W-9 Township of Leeds and the Thousand Islands Water Service Scenario 3 Water Reserve Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 429,786 493,512 563,812 631,868 69,594 80,725 88,301 97,056 105,467 15,000 17,000 18,000 29,000 17,000 429,786 493,512 563,812 631,868 720,335 -

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2025 720,335 114,555 834,891 -

2026 834,891 123,061 957,952 -

2027 957,952 133,047 1,090,999 -

2028 1,090,999 142,414 1,233,414 -

2029 1,233,414 153,555 1,386,969 -

2030 1,386,969 163,785 1,550,754 -

PAGE A-7

Table W-10 Township of Leeds and the Thousand Islands Water Services Scenario 3 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserve Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Total Revenues

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

42,700 17,300 5,000 149,008 3,200 9,750 240,208

50,800 10,400 5,100 152,000 3,300 9,900 244,960

48,700 13,700 5,200 155,000 3,300 10,100 249,770

47,400 16,300 5,300 158,100 3,400 10,300 254,990

42,500 22,400 5,400 161,300 3,500 10,600 260,000

43,400 22,800 5,500 164,500 3,500 10,800 265,210

44,200 23,400 5,600 167,800 3,600 11,000 270,520

45,100 23,800 5,700 171,200 3,700 11,200 276,030

46,000 24,300 5,900 174,600 3,700 11,400 281,440

46,900 24,800 6,000 178,100 3,800 11,700 287,060

47,900 25,200 6,100 181,600 3,900 11,900 292,760

69,594 69,594 309,802

80,725 80,725 325,685

88,301 88,301 338,071

97,056 97,056 352,046

105,467 105,467 365,467

114,555 114,555 379,765

123,061 123,061 393,581

133,047 133,047 409,077

142,414 142,414 423,854

153,555 153,555 440,615

163,785 163,785 456,545

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

277,835 15,218 293,052 309,802

288,491 20,094 308,585 325,685

299,553 21,118 320,671 338,071

312,034 22,212 334,246 352,046

323,989 23,278 347,267 365,467

337,468 23,798 361,265 379,765

350,386 24,295 374,681 393,581

364,941 24,836 389,777 409,077

378,900 25,354 404,254 423,854

394,617 25,899 420,515 440,615

409,698 26,447 436,145 456,545

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PAGE A-8

Table W-11 Township of Leeds and the Thousand Islands Water Services Scenario 3 Water Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 3.940

$ $

75.05 91.13

$ $

2.797 $ 3.698 $ -6.1%

2.835 $ 3.748 $ 1.4%

2.866 $ 3.790 $ 1.1%

2.904 $ 3.840 $ 1.3%

2.944 $ 3.892 $ 1.4%

2.993 $ 3.957 $ 1.7%

3.034 $ 4.011 $ 1.4%

3.084 $ 4.078 $ 1.7%

3.124 $ 4.131 $ 1.3%

3.177 4.201 1.7%

$ $

77.68 $ 94.32 $ 3.5%

80.40 $ 97.62 $ 3.5%

83.21 $ 101.04 $ 3.5%

86.12 $ 104.57 $ 3.5%

89.14 $ 108.23 $ 3.5%

92.26 $ 112.02 $ 3.5%

95.48 $ 115.94 $ 3.5%

98.83 $ 120.00 $ 3.5%

102.29 $ 124.20 $ 3.5%

105.87 128.55 3.5%

3

Monthly Base Charge (includes 20 m ) 1 ½" or less 2" or greater 3

Monthly Base Charge (includes 15 m ) 1 ½" or less 2" or greater Annual Increase (%)

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PAGE A-9

Appendix B Wastewater Services

Watson & Associates Economists Ltd.

PAGE B-1

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Table WW-1a Township of Leeds and the Thousand Islands Wastewater Service Capital Budget Forecast Uninflated $ Description Capital Expenditures Build Shed at SPS Submersible Pump #1 Rebuild / Replace Submersible Pump #2 Rebuild / Replace Water Meter Replacement Program Total Capital Expenditures

Total

10,000 15,000 20,000 49,140 94,140

Forecast

Budget 2020 15,000 15,000

2021

2022

2023

10,000 16,380 26,380

20,000 16,380 36,380

16,380 16,380

2024

2025

2026

2027

2028

2029

2030

-

-

-

-

-

-

-

Table WW-1 Township of Leeds and the Thousand Islands Wastewater Service Capital Budget Forecast Inflated $ Description Capital Expenditures Build Shed at SPS Submersible Pump #1 Rebuild / Replace Submersible Pump #2 Rebuild / Replace Water Meter Replacement Program Total Capital Expenditures Capital Financing Provincial/Federal Grants Debenture Requirements Operating Contributions Wastewater Reserve Total Capital Financing

Total

Forecast

Budget 2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

10,000 15,000 21,000 53,000 99,000

15,000 15,000

10,000 17,000 27,000

21,000 18,000 39,000

18,000 18,000

-

-

-

-

-

-

-

99,000 99,000

15,000 15,000

27,000 27,000

39,000 39,000

18,000 18,000

-

-

-

-

-

-

-

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PAGE B-2

Table WW-2 Township of Leeds and the Thousand Islands Wastewater Service Schedule of Debenture Repayments Inflated $ Debenture Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total Annual Debt Charges

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Principal (Inflated) -

Budget 2020

-

Forecast 2021

2022 -

2023 -

2024 -

2025 -

2026 -

2027 -

2028 -

2029 -

2030 -

-

-

-

-

-

-

-

-

-

-

Table WW-3 Township of Leeds and the Thousand Islands Wastewater Service Scenario 1 Wastewater Reserves Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 449,455 527,331 610,553 731,813 89,263 104,876 122,222 139,260 162,350 15,000 27,000 39,000 18,000 449,455 527,331 610,553 731,813 894,164 -

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2025 894,164 185,285 1,079,449 -

2026 1,079,449 209,001 1,288,450 -

2027 1,288,450 235,994 1,524,443 -

2028 1,524,443 263,582 1,788,025 -

2029 1,788,025 295,228 2,083,253 -

2030 2,083,253 327,322 2,410,575 -

PAGE B-3

Table WW-4 Township of Leeds and the Thousand Islands Wastewater Services Scenario 1 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

104,876 104,876 314,136

122,222 122,222 335,592

139,260 139,260 359,750

162,350 162,350 384,450

185,285 185,285 411,895

209,001 209,001 440,121

235,994 235,994 471,724

263,582 263,582 504,022

295,228 295,228 540,388

327,322 327,322 577,482

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

284,516 12,520 297,036 314,136

305,310 12,882 318,192 335,592

328,513 13,437 341,950 359,750

352,617 13,633 366,250 384,450

379,491 13,905 393,395 411,895

407,046 14,174 421,221 440,121

437,979 14,445 452,424 471,724

469,688 14,734 484,422 504,022

505,283 15,005 520,288 540,388

541,769 15,313 557,082 577,482

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PAGE B-4

Table WW-5 Township of Leeds and the Thousand Islands Wastewater Services Scenario 1 Wastewater Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

Volume Charges ($/m 3) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 4.000

$ $

2.418 $ 3.246 $ -18.8%

2.457 $ 3.298 $ 1.6%

2.523 $ 3.387 $ 2.7%

2.529 $ 3.394 $ 0.2%

2.565 $ 3.443 $ 1.4%

2.607 $ 3.500 $ 1.7%

2.642 $ 3.547 $ 1.3%

2.688 $ 3.608 $ 1.7%

2.722 $ 3.654 $ 1.3%

2.771 3.719 1.8%

Monthly Base Charge (includes 20 m 3) 1 ½" or less 2" or greater Annual Increase (%)

$ $

70.86 86.04

$ $

76.61 $ 93.02 $ 8.1%

81.94 $ 99.49 $ 7.0%

87.60 $ 106.37 $ 6.9%

93.73 $ 113.81 $ 7.0%

100.24 $ 121.71 $ 6.9%

107.17 $ 130.13 $ 6.9%

114.59 $ 139.14 $ 6.9%

122.51 $ 148.75 $ 6.9%

130.97 $ 159.03 $ 6.9%

139.99 169.98 6.9%

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Table WW-6 Township of Leeds and the Thousand Islands Wastewater Service Scenario 2 Wastewater Reserves Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 449,455 527,331 610,553 731,813 89,263 104,876 122,222 139,260 162,350 15,000 27,000 39,000 18,000 449,455 527,331 610,553 731,813 894,164 -

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2025 894,164 185,285 1,079,449 -

2026 1,079,449 209,001 1,288,450 -

2027 1,288,450 235,994 1,524,443 -

2028 1,524,443 263,582 1,788,025 -

2029 1,788,025 295,228 2,083,253 -

2030 2,083,253 327,322 2,410,575 -

PAGE B-5

Table WW-7 Township of Leeds and the Thousand Islands Wastewater Services Scenario 2 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

104,876 104,876 314,136

122,222 122,222 335,592

139,260 139,260 359,750

162,350 162,350 384,450

185,285 185,285 411,895

209,001 209,001 440,121

235,994 235,994 471,724

263,582 263,582 504,022

295,228 295,228 540,388

327,322 327,322 577,482

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

279,965 17,071 297,036 314,136

300,256 17,936 318,192 335,592

322,840 19,110 341,950 359,750

346,492 19,758 366,250 384,450

373,191 20,205 393,395 411,895

400,598 20,623 421,221 440,121

431,352 21,071 452,424 471,724

462,901 21,520 484,422 504,022

498,316 21,972 520,288 540,388

534,631 22,451 557,082 577,482

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PAGE B-6

Table WW-8 Township of Leeds and the Thousand Islands Wastewater Services Scenario 2 Wastewater Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 4.000

$ $

70.86 86.04

$ $

2.357 $ 3.164 $ -20.9%

2.389 $ 3.207 $ 1.4%

2.448 $ 3.286 $ 2.5%

2.447 $ 3.285 $ 0.0%

2.482 $ 3.331 $ 1.4%

2.522 $ 3.386 $ 1.6%

2.556 $ 3.431 $ 1.3%

2.599 $ 3.489 $ 1.7%

2.632 $ 3.533 $ 1.3%

2.678 3.595 1.8%

$ $

75.38 $ 91.53 $ 6.4%

80.58 $ 97.85 $ 6.9%

86.09 $ 104.53 $ 6.8%

92.10 $ 111.83 $ 7.0%

98.57 $ 119.69 $ 7.0%

105.48 $ 128.07 $ 7.0%

112.86 $ 137.04 $ 7.0%

120.74 $ 146.60 $ 7.0%

129.16 $ 156.84 $ 7.0%

138.15 167.74 7.0%

3

Monthly Base Charge (includes 20 m ) 1 ½" or less 2" or greater 3

Monthly Base Charge (includes 15 m ) 1 ½" or less 2" or greater Annual Increase (%)

Description Opening Balance Transfer from Operating Transfer to Capital Transfer to Operating Closing Balance Interest

Table WW-9 Township of Leeds and the Thousand Islands Wastewater Service Scenario 3 Wastewater Reserves Continuity Inflated $ 2020 2021 2022 2023 2024 375,192 449,455 519,750 585,545 678,577 89,263 97,295 104,794 111,033 121,758 15,000 27,000 39,000 18,000 449,455 519,750 585,545 678,577 800,335 -

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2025 800,335 130,721 931,056 -

2026 931,056 139,227 1,070,283 -

2027 1,070,283 149,207 1,219,490 -

2028 1,219,490 158,426 1,377,917 -

2029 1,377,917 169,496 1,547,413 -

2030 1,547,413 179,515 1,726,928 -

PAGE B-7

Table WW-10 Township of Leeds and the Thousand Islands Wastewater Services Scenario 3 Operating Budget Forecast Inflated $ Description Expenditures Operating Costs Office Supplies Postage / Courier Insurance Leases Consultants Auditors Miscellaneous Supplies Contracted Jobs OCWA - Maintenance Forecast Other Maintenance O.C.W.A. Water & Sewer - Grant in Lieu Program Support Costs - Internal Sub-Total Operating Costs Capital-Related Transfer to Capital Reserve Sub-Total Capital-Related Total Expenditures Revenues Operating Revenues Interest Earned Penalty & Interest Rentals Contributions from Reserves / Reserve Funds Sub-Total Operating Revenues Billing Revenues Base Charge Revenue Consumptive Revenue Sub-Total Billing Revenues Wastewater Billing Recovery - Total

Budget 2020

2021

2022

2023

2024

Forecast 2025 2026

2027

2028

2029

2030

250 1,700 5,800 100 2,500 1,200 200 1,500

260 1,700 5,900 100 2,600 1,200 200 1,500

260 1,800 6,000 100 2,600 1,200 210 1,600

270 1,800 6,200 110 2,700 1,300 210 1,600

270 1,800 6,300 110 2,700 1,300 220 1,600

280 1,900 6,400 110 2,800 1,300 220 1,700

280 1,900 6,500 110 2,800 1,400 230 1,700

290 2,000 6,700 110 2,900 1,400 230 1,700

290 2,000 6,800 120 2,900 1,400 230 1,800

300 2,000 6,900 120 3,000 1,400 240 1,800

300 2,100 7,100 120 3,000 1,500 240 1,800

40,000 20,000 5,000 113,992 3,200 9,750 205,192

39,800 21,400 5,100 116,300 3,300 9,900 209,260

49,900 12,500 5,200 118,600 3,300 10,100 213,370

66,300 5,300 121,000 3,400 10,300 220,490

34,600 30,300 5,400 123,400 3,500 10,600 222,100

35,300 30,900 5,500 125,900 3,500 10,800 226,610

36,000 31,600 5,600 128,400 3,600 11,000 231,120

36,700 32,200 5,700 130,900 3,700 11,200 235,730

37,500 32,800 5,900 133,600 3,700 11,400 240,440

38,200 33,500 6,000 136,200 3,800 11,700 245,160

39,000 34,100 6,100 139,000 3,900 11,900 250,160

89,263 89,263 294,455

97,295 97,295 306,555

104,794 104,794 318,164

111,033 111,033 331,523

121,758 121,758 343,858

130,721 130,721 357,331

139,227 139,227 370,347

149,207 149,207 384,937

158,426 158,426 398,866

169,496 169,496 414,656

179,515 179,515 429,675

8,000 2,000 6,750 16,750

8,200 2,000 6,900 17,100

8,300 2,100 7,000 17,400

8,500 2,100 7,200 17,800

8,700 2,200 7,300 18,200

8,800 2,200 7,500 18,500

9,000 2,300 7,600 18,900

9,200 2,300 7,800 19,300

9,400 2,300 7,900 19,600

9,600 2,400 8,100 20,100

9,800 2,400 8,200 20,400

262,323 15,382 277,705 294,455

272,384 17,071 289,455 306,555

282,828 17,936 300,764 318,164

294,613 19,110 313,723 331,523

305,900 19,758 325,658 343,858

318,626 20,205 338,831 357,331

330,824 20,623 351,447 370,347

344,566 21,071 365,637 384,937

357,746 21,520 379,266 398,866

372,585 21,972 394,556 414,656

386,824 22,451 409,275 429,675

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PAGE B-8

Table WW-11 Township of Leeds and the Thousand Islands Wastewater Services Scenario 3 Wastewater Rate Forecast Inflated $ 2020 2021 2022 2023 2024

Description

2025

2026

2027

2028

2029

2030

3

Volume Charges ($/m ) Volume Charge (1 ½" or less) Volume Charge (2" or greater) Annual Increase (%)

$ $

2.980 4.000

$ $

70.86 86.04

$ $

2.357 $ 3.164 $ -20.9%

2.389 $ 3.207 $ 1.4%

2.448 $ 3.286 $ 2.5%

2.447 $ 3.285 $ 0.0%

2.482 $ 3.331 $ 1.4%

2.522 $ 3.386 $ 1.6%

2.556 $ 3.431 $ 1.3%

2.599 $ 3.489 $ 1.7%

2.632 $ 3.533 $ 1.3%

2.678 3.595 1.8%

$ $

73.34 $ 89.05 $ 3.5%

75.91 $ 92.17 $ 3.5%

78.56 $ 95.39 $ 3.5%

81.31 $ 98.73 $ 3.5%

84.16 $ 102.19 $ 3.5%

87.11 $ 105.77 $ 3.5%

90.15 $ 109.47 $ 3.5%

93.31 $ 113.30 $ 3.5%

96.57 $ 117.26 $ 3.5%

99.96 121.37 3.5%

3

Monthly Base Charge (includes 20 m ) 1 ½" or less 2" or greater 3

Monthly Base Charge (includes 15 m ) 1 ½" or less 2" or greater Annual Increase (%)

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PAGE B-9